Thursday, July 21, 2016

A Very Brief History of Pricing By Indication

After running into several white papers on Pricing By Indication (PBI), and recalling a 2014 article in JAMA by Peter Bach on the topic, I pulled together some internet research into a Very Brief Index (VBI) on PBI.

If you're going to develop scorecards for drug value - as ASCO and NCCN had recently proposed to do - you quickly confront the fact that the same cancer drug may have very different Cost/QALYs in different indications. For example, Bach presented a table that if you set the price per $150,000 for life year gained, prices might range from $400 to $10,000 monthly for the same drug.

American Journal of Managed Care ran a news article on the JAMA article, almost immediately (here).

September 2015

Bach publishes another article, this time in Journal of Clinical Oncology, "Walking the Tightrope Between Treatment Efficacy and Price," here. He reviews a number of economic topics, including price by indication.

October 2015

The Office of Health Economics in the U.K. publishes a lengthy white paper, "Multi-indication Pricing: Pros, Cons and Applicability to the UK," running 52 pages (here).

Express Scripts releases a story on its own website on indication specific pricing, here, under the headline, "Right Drug, Right Price."

The Pharmalot essay series, at STATLINE, publishes an article on indication specific pricing, here. (Also citing their February article on QALYs and pricing, here.)

May 2016
At the ISPOR website, see a May2016 dated 6 page slide deck by Ansgar Hebborn of Hoffmann-La Roche on indication specific pricing (aka multi indication pricing), here. Not specific to indication based pricing, see also an ISPOR conference on value frameworks in DC, held September 23, 2016, here.June 2016
ASCO's work on "value by tumor type" is reviewed by Pink Sheet, here.

July 2016
At the PharmaForum website, see an article on "Multi-Indication Pricing: No longer mission impossible?" by Lella Barham, a UK pharma consultant, here.

A JAMA OpEd by Mailankody & Prasad describes Medicare proposed reforms to control high cancer drug prices, noting the agency has floating that it has the authority to begin demos on the topic of pricing by indication, here.

A Pink Sheet article on changes in the PBM industry (involving large employers) mentions in passing this could "give us more ability to create value for them...around indication based pricing," here.

About the Author

Bruce Quinn MD PhD is an expert on health reform, innovation, and Medicare policy. He helps both large and small companies understand and overcome hurdles to commercialization, as well as craft business strategies for a changing environment. CONTACT Dr. Quinn through www.brucequinn.com. BACKGROUND: Dr. Quinn has worked in academic medicine, Accenture business strategies, and for the Medicare program. EDUCATION: Stanford MD/PhD, MIT Postdoc, Kellogg MBA.